The pitch: When Luke Saunders was on the road doing outside sales for a manufacturing company he was on the road all the time, mostly in industrial areas or small Midwestern towns where there were few healthy food options. “It was always fast food,” he says. Saunders grew up eating very healthy. “We didn’t eat much fast food or processed food. But when I was traveling, it was impossible to get good food. I realized it was a distribution problem.”

Saunders started visiting food manufacturers to find out why this was the case and realized that things like, for example, granola bars, are mass produced because their supply chain is so long. That sparked the idea for Farmer’s Fridge, a self-serve kiosk system for distributing healthy, fresh, unprocessed food – mostly by shortening the supply chain. The kiosks are placed in neighborhoods that generally lack healthy food options, and the company rents underutilized space, which is often priced lower than it would be in more upscale neighborhoods. “We turn that underutilized space into a product asset for an office building, convenience store or hospital, so the rents are relatively low,” says Saunders.

A Farmer's Fridge kiosk. Photo courtesy Farmer's Fridge.

What they look like: The kiosks were designed by Farmer’s Fridge, and are made with reclaimed wood. The average kiosk is 14 square feet (with a few as large as 30) and have a touch screen and glass front. Saunders wanted the kiosks to look “authentic and real,” he says, to contrast with the usual automated feel of a kiosk. There are a couple of exceptions to that, where an artist actually designed the kiosk, like the one that resides in the office building at 600 West Chicago Avenue.

How it works: The kiosk itself is essentially a sealed, closed refrigerator that is completely automated. After a customer chooses the product they want, an elevator within the kiosk rises and a motor inside pushes the meal onto the platform and then out to the customer. Inside are mostly salads—Farmer’s Fridge sells ten different ones, as well as three breakfast items and a few snacks, like crudité, fruit cups, chicken and tofu, as well as a chocolate trail mix.

The food is prepared in one central facility in Chicago. All the raw ingredients for the salads and other items arrive between 5am and 6am. During the day food is prepped—lots of cooking and cutting, says Saunders. Then the night shift comes in and assembles all the salads (with names like Shaved Veggie and Kale or Shrimp and Succotash) and the other food offerings and vans leave the company’s kitchen at 4am to deliver food to the kiosks around Chicago. Food that wasn’t sold the previous day is removed from the kiosks and given to charitable groups in the city.

Traction: Same kiosk sales are growing about 10-20 percent a month says Saunders. The company has 30 kiosks in Chicago, mostly clustered downtown, but plans to build further and further out, eventually expanding to 100 by mid-2016 and then they will raise money to expand throughout the Midwest and nationwide, he says.

Revenue and funding: Revenue comes from kiosk sales and catering which the company also offers. About 30 percent of the company’s revenue comes from catering, says Saunders and it’s all made in the same kitchen (and is the same food). “It’s an add-on really,” says Saunders. “Especially for an office, if they are having a meeting or a talk, they’ll want these salads delivered. Some of our best clients are heavy duty sales places and tech companies, they just want their employees to get something to eat and take it to their desk and keep working.” The company took its first outside investment in May, closing a Series A worth “a few million,” says Saunders.

Challenges: The biggest challenge for Farmer’s Fridge is communicating to potential customers how much work and energy goes into providing freshly prepared food in the very small space a kiosk provides. “When they see it, they need to immediately understand what it is," Saunders says. "We’re trying to figure out how to do that on the kiosk, to get people to say when they see it, ‘Oh, I get it. It’s fresh food...’ With the kiosk, we have to minimalize messages down to the two or three you want people to get: ‘When was this food inside made?’ ‘What’s it all about?’ and ‘How can I reach them if I have a problem?’

Farmers Fridge is also completely overhauling the software that runs its platform, so that its kitchen is more directly connected to the kiosks, getting just-in-time inventory updates. On the consumer end, the company is aiming to have a consumer app ready to roll in the new year that will give them ways to interact with the kiosk from their phone.